Third-party service providers are financial organizations that help you to comply with your bank’s banking regulations. Some of the functions of third-party service providers are payment processing services, support on credit decisions, and retention of records.
In general, third party service providers have applications that help connect bank institutions to their consumers.
But these third party apps are becoming more and more service oriented for consumers as mobile and online banking becomes more common.
How does it work?
With the rapid increase of banking online services, lending companies seek further support from third-party service providers. Third party service providers typically have a better user friendly interface and functions that better manage your delicate and confidential information including personal identification.
New laws are changing
With ongoing technology, banking is speeding up its development to get in tune in our current time. For example in Europe, the Revised Payment Service Directive or the “PSD2” is now being implemented. This law gives stronger security requirements and enables you to manage your finances not just directly with bank, but any third party apps you choose.
How third party service providers help you get approved for loans?
Simply put, by managing your finances through apps that provide pro-active services to help you budget, you would be able to improve your credit much easier than dealing directly with your bank.
By improving your credit, your ability to score a loan with better terms becomes easier over time. Also, if you are looking for a loan at the very moment, third party apps use creative guidelines criteria on top of your traditional banking requirements to approve you for a loan.